On March 15, 2017, the Chairman of the Office for the Protection of Competition Petr Rataj confirmed multiple past decisions by the Office imposing a CZK 11 million administrative penalty on the City of Prague. The fine relates to violations by the City in the award of public contracts for the construction of the new Troja bridge project, identified as section no. 0079 (Špejchar – Pelc – Tyrolka) of Prague’s City Ring.

The Office Chairman fully confirmed both the contested decision and the Office’s reasoning, i.e. that the City had significantly changed the rights and duties under its work contract with the chosen supplier and this was a breach of the relevant law (Act No. 137/2006 Coll., on public procurement, as amended) in the absence of the required public tender process. In particular, the technical design for the bridge had been altered entirely from the original plan and the construction price had been increased to  double the original fee. The City was held to have broken the law not by concluding a contractual amendment but through a series of implied acts and arrangements between the contracting authority and the selected contractor. The Chairman also rejected the City’s claims that its liability had expired under the statute of limitations; instead, he applied the legal doctrine of the ongoing administrative offence. Finally, he drew support for his findings from the case law of state administrative tribunals and the EU Court of Justice, including judgment No. C-454/06 in Pressetext Nachrichtenagentur GmbH v. Republik Österreich (Bund).

A two-month appeal period is now under way during which the City may contest the Office’s decision by filing an administrative appeal. The City has indicated its intention to take this action in the media. The case is, thus, likely to be reviewed next by the Regional Court in Brno and may then come before the Supreme Court.

The Office Chairman’s decision can be viewed at https://www.uohs.cz/cs/verejne-zakazky/sbirky-rozhodnuti/detail-14693.html.  

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